RED FLAG CERTIFICATE

Prison Time For Two Car Dealership Owners Convicted For Bank Fraud

October 01, 2013

A joint investigation including DMV and DOJ

Two Modesto brothers, owners of several car dealerships in Stanislaus and Merced Counties, are heading to prison for more than four years each as a result of their conviction for conspiring to commit bank fraud.

“These men, along with several of their employees falsified the information of potential car buyers in order for the potential buyers to acquire financing,” said Alan Barcelona, president of the California Statewide Law Enforcement Association (CSLEA). “Our CSLEA members who are investigators with the Department of Motor Vehicles (DMV) and special agents with the Department of Justice (DOJ) investigate these types of crimes in which unscrupulous people put their own financial gain over the law and over unsuspecting consumers who would not have qualified for loans in the first place.”

The two men were found guilty after a three-day trial by a federal jury in January 2013. According to evidence presented at trial, the Jawad brothers owned and operated various used automobile dealerships including Own-A-Car, The Auto Store, and Auction 2 U in Modesto. Employees of the dealerships would help customers to find a vehicle to purchase. Many of the customers, however, were unable to qualify for a vehicle loan. The Jawads, and others acting at their direction and on their behalf, conspired to assist the customers in preparing misleading and false financial information for submission to a financial institution in order to obtain financing.

In some instances the defendants conspired to enter fictitious information on loan applications including the names of employers for whom the customers did not work, or, if the customers were employed, inflated earnings amounts. Some of the customers signed these loan applications, while others had no knowledge of how their signatures appeared on the applications.

Because of the defendants’ conduct, financial institutions approved loans to customers who otherwise should not have received financing. As customers were approved for loans, the dealerships received the money as payment for the purchased vehicles.

The two Jawad brothers were sentenced to prison for more than four years each and ordered to pay approximately $601,000 in restitution to the victims of their fraud. The pair were ordered to surrender on November 18, 2013 to begin serving their sentences.

Three other defendants in this case have been sentenced after pleading guilty. Armando Fathic Abdallah was sentenced March 4, 2013, to 18 months in prison. Hussein Ali was sentenced to 27 months in prison on March 18, 2013, and Husam Sarama was sentenced in February 19, 2013 to three months in prison.

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